naturalnews.com printable article

Originally published January 14 2009

Retired Couples Urged to Set Aside $225,000 to Cover Health Care Costs

by David Gutierrez, staff writer

(NaturalNews) The average couple retiring in 2008 will need $225,000 just to cover its health care costs, according to a report published by Fidelity Investments.

"Health-care costs have the potential to significantly erode an individual's retirement savings," said Brad Kimler, senior vice president of Fidelity Employer Services. "Knowing that these costs are only going to continue to increase, all Americans, even those as far as 20 years away from retirement, should be calculating and factoring lifelong health-care expenses into their overall financial planning."

The report assumes that a couple retires at 65, with the woman living to 85 and the man to 82. The calculated costs include 32 percent for Medicare part B and D premiums, 35 percent for Medicare co-payments, co-insurance, deductibles and excluded benefits, and 33 percent for out-of-pocket prescription drug costs.

The current estimate is 4.7 percent higher than the 2007 estimate of $215,000, making health care one of the fastest rising costs for retired people in the United States. The average yearly increase has been 5.8 percent since 2002.

The $225,000 figure does not include most dental expenses, over-the-counter drugs or long-term medical care.

Another study by the Center for Retirement Research at Boston College calculated the average retirement health-care costs of an individual as $102,000, a very similar figure.

These estimates assume that retirees do not have an employer-provided health plan. According to the Kaiser Family Foundation, two-thirds of retirees now find themselves in this situation in comparison to only one third in 1998.

Some savings accounts are designed to help people save for retirement health expenses. One of these, the health savings account (HSA), allows tax-exempt health-related withdrawals after retirement, but only for those who also buy a qualified health insurance policy with a high deductible. Due to their limited coverage, HSA-compatible health plans tend to be cheaper than plans with lower deductibles.






All content posted on this site is commentary or opinion and is protected under Free Speech. Truth Publishing LLC takes sole responsibility for all content. Truth Publishing sells no hard products and earns no money from the recommendation of products. NaturalNews.com is presented for educational and commentary purposes only and should not be construed as professional advice from any licensed practitioner. Truth Publishing assumes no responsibility for the use or misuse of this material. For the full terms of usage of this material, visit www.NaturalNews.com/terms.shtml